Yesterday Comcast announced that it is in the market for buying most of the media assets of Twenty-First Century Fox for cash, preparing a bid to best Disney which already made an offer. The media will call this a “bidding war,” but the truth behind the hyperbole is that this is the free market operating as it should. The bidding highlights the robust competitive marketplace in online video.
This healthy level of competition can be seen across the technology and communications industries. Ironically Washington, D.C. seems to want to ignore such obvious evidence most recently with a Senate vote to reverse the FCC on its order to lift restrictions on the internet. That decision followed on the heels of what should have been widely understood as an embarrassing Senate hearing about Facebook. Nevertheless, despite the demonstrated ignorance the Senators involved in questioning during the hearing, the chamber has continued its sophistry asserting that competition is scarce.
But the desire of competitors to acquire Fox’s media assets should make plain at least this fact – that the technology and communications industries are highly competitive and filled with valuable assets, intellectual and otherwise. The daily fight is to bring the best to consumers to justify the value of those assets, or to add complimentary assets to drive even greater value to consumers. The value in this proposed deal is not just in the U.S. but around the world. Many of the assets up for sale are located globally.
That U.S. companies are growing internationally, either organically or through acquisition, typically indicates a strong industry and a strong U.S. economy. That is true in this case. Compare that to when international companies are buying up assets in the U.S., that is typically a signal that our economy is hurting and that the assets are a good buy…for someone else. Importantly, the international operations considered here would allow more effective competition in the robust global landscape by gaining some advantages of scale.
The owners, the shareholders, will have the final say in who can purchase the assets. They should act in their best interests as they are, in fact, the owners of the business, owners of the property that has been built and created in the private sector. The market is working. Sellers are wanting to sell, buyers are lining up with their best offers, the owners will make a decision in the best interest of the shareholders, and the U.S. economy will benefit with consumers winning, both here and around the world.
